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INTRA INDUSTRY TRADE IN EAST ASIA

TEGUH PRASETYA NUGRAHA, Professor Shingo Takahashi.

2012 | Tesis | S2 Magister Ek.Pembangunan

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This paper aims to investigate which one is more dominant between inter industry trade and intra industry trade both within East Asian region (intra regional) and outside East Asian region (inter regional) from year 1980-2010. By employing Grubell-Lloyd Index, we find that from year 1980-1995 inter industry trade dominated East Asian trade both in intra regional and inter regional. However, from year 2000-2010 the domination persists only in inter regional. Intra industry trade has been increasing from year to year in both intra regional and inter regional, but its increase in intra regional surpasses inter regional, particularly from year 2000-2010, indicating “de facto” economic integration. By utilizing Greenaway, Hine and Milner formula, we ascertain vertical industry trade (VIIT), both high and low, as the cause for this occurrence, where companies split their production stages to countries where factors of production are less expensive. Various Regional Trade Agreements (RTAs) have been made to deepen the integration signaling the willingness of the region to enhance regionalism.

Kata Kunci : intra industry, inter industry, inter regional, intra regional


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